COVID-19 is, in many ways, still a disease of uncertainty, both in the severity of its symptoms and the scale of financial hardship it could ultimately cause. And no business is better equipped to confront uncertainty than insurers.
So it is perhaps unsurprising that life and health carriers are responding to the pandemic with a variety of consumer offerings, from complimentary, compassionate benefits, to new protection products and services.
After performing a global review of responses to COVID-19, RGA identified six primary product development trends:
Compassionate and Complimentary Benefits
Insurers have sought to build trust and goodwill by offering complimentary COVID-19 coverage as a compassionate benefit or marketing expense, with an emphasis on lower face value policies to manage overall exposure. A multinational insurer in Hong Kong, for example, has begun offering an additional hospital cash benefit of HK$600 (equivalent to US$77) per day for covered clients who may be required to undergo a mandatory quarantine in a hospital or isolation center. Similarly, the local branch-of another major insurer in Thailand partnered with a leading telecom operator to offer a market-first, free-of-charge COVID-19 coverage benefit to customers. If a customer requires treatment in a hospital, he or she will receive a hospital indemnity benefit of up to THB1,000 (equivalent to US$31) per day. Still another multinational partnered with a Singapore-based insurer serving private hire drivers to offer a complimentary benefit for all of these essential workers as part of the company’s Group Prolonged Medical Leave insurance policy.
Other forms of consumer relief have proved popular, including premium holidays, grace periods, and reductions to policy/premium amounts. Many insurers globally have offered grace periods for premium payments either voluntarily or at the request of local governments and regulators. On the health insurance side, some insurers have waived cost-sharing, co-pay, and other deductibles for inpatient hospital admissions due to COVID-19. Some have also sought to support healthcare first responders and other frontline workers through donations of Personal Protective Equipment (PPE) and other charitable efforts.
COVID-19 emerged first in Asia, so it stands to reason that regional insurers have been first to develop hospital cash and comprehensive care products offering standalone protection in case of diagnosis. For example, one Bangkok-based broker and insurer teamed up to offer Thailand's first policy that provides cash upon diagnosis with the coronavirus. Similarly, a major Indian insurer offers a COVID-19 support plan, providing end-to-end treatment services, including consultations with qualified doctors, to policyholders who become infected. In Malaysia, a major multinational has introduced a COVID-19 hospital assistance program with an upfront one-time cash payment upon hospitalization with the disease. The program includes a one-time cash payout for family assistance should dependents also be diagnosed. It also includes other assistance for consultation and treatment costs while in isolation or intensive care. Similar products are now emerging across Europe and North America.
The word pandemic derives from the combination of two Greek words: pan ‘all’ and dēmos ‘people’. The great irony of the COVID-19 pandemic is that, while all are at risk of contracting the virus, a few face far greater danger due to the essential public services they must perform. Insurers are customizing certain offerings to serve these frontline workers. In China, a first-in-market COVID-19 medical worker insurance program pays cash compensation upon diagnosis. Similarly, healthcare personnel at specified primary and secondary public hospitals, treatment centers, and pharmacies are eligible to sign up for another Chinese insurer’s COVID-19 coverage for free. Another insurer launched COVID-19 coverage targeting shopkeepers in India, with the product paying 100% of the sum insured, irrespective of hospitalization expense, upon diagnosis.
Health and Wellbeing
The coronavirus not only co-opts our cells, it exploits our fears. A lack of clear information and shortages of available testing have compounded the problem in some locations. U.S. insurers responded with new consumer plans that seek to bundle mental wellness services with physician care to address public anxiety with clear and actionable medical guidance. One U.S.-based healthcare carrier repurposed its existing telehealth application for mobile devices. The app now provides a coronavirus assessment based on guidelines from the U.S. Centers for Disease Control and the U.S. National Institutes of Health. Customers can connect directly to a board-certified doctor via text or secure two-way video call, and use the app to discuss the assessment results. Another U.S-based provider of healthcare IT solutions and services launched a new telehealth product to help physicians and patients stay connected during COVID-19 through real-time video technology. A number of mental health schemes have also emerged around the world with an emphasis on technology to address social isolation.
Artificial Intelligence (AI) has been coming to medicine, and insurance, for some time. Now the spread of COVID-19 may present a new opportunity to increase use of smart apps and chatbots. A number of insurers are relaunching and rebranding existing AI applications to meet surging diagnosis and informational needs in an era of social distancing and staffing shortages. In China, one major insurer launched a smart, AI-based audio screening system for COVID-19 to strengthen epidemic control and prevention through automated interviewing and risk assessment. Another U.S.-based case manager launched a coronavirus chatbot to answer COVID-19 related questions and assist in diagnosis, and a multinational in Hong Kong retooled its mobile application to assist in coronavirus contact tracing. Much remains unknown about the overall effectiveness of these emerging technologies, but the increasing use of AI is a trend that merits close monitoring.
New Approaches to Sales Operations
COVID-19 has been dubbed an “invisible enemy”, but its effect on the insurance industry has been very apparent. As traditional evidence and sales channels have been disrupted by lockdowns, carriers have moved to accelerate a transition to alternative evidence, simplified and accelerated underwriting, and digital distribution.
“Selling at a distance” is a hot industry topic, and those insurers with relatively strong digital capabilities may be best positioned, while others are playing catch-up. A major multinational recently launched a digital enrollment system, while another unveiled “simple life insurance” to be sold online. Another insurer is now using WhatsApp to deliver policy and renewal documents. One carrier has simplified the claims process for its critical illness policyholders. Upon diagnosis of COVID-19, the policyholder needs to only submit a certificate from a government medical officer to receive a lump sum payout rather than the more copious paperwork typically required.
As the pandemic unfolds, we expect more offerings to emerge. In the medium term, it may not just be health and safety concerns that drive offering design, but the state of the overall economy itself. Interest rates and slowing economies are placing renewed pressure on insurers to reassess less profitable offerings, such as those with generous guarantees, and to emphasize capital efficiency in the overall product portfolio. Against this challenging backdrop, it is unclear how many product innovations of all kinds are languishing in the exploratory phase versus being introduced to consumers at this time.